YOURSAY | ‘It’s no wonder Malaysia’s finances are on a dangerous path.’

COMMENT | FashionValet - buck can't stop with the 2 founders

KK Voter: To be fair, investing in start-ups in the hope of finding a unicorn is what investment funds do.

It is a sobering fact that 80 percent of start-ups fail within the first five years and another 80 percent of the remaining fail in the next five years.

This is something I have witnessed first-hand, having worked with hundreds of business owners as well as venture capitalists to evaluate deals.

That said, the investigation should address at least these two questions:  

1. Did Khazanah Nasional Bhd and Permodalan Nasional Bhd (PNB) follow strict, consistent criteria in their evaluation process, which should be applied to every potential investment, such as niche and management team expertise?

2. The fashion market in the non-luxury segment is notoriously difficult. How did they decide that FashionValet Sdn Bhd had a chance to succeed?

On the other hand, Grab faced less competition during its seed funding round but was somehow deemed too risky.  

Every online business experienced a boom during Covid-19 while their brick-and-mortar counterparts faced significant downturns.

Strangely, in FashionValet’s case, both their online and brick-and-mortar segments experienced similar massive downturns, despite supposed prior investments in their technology stack before Covid-19.

Something about this picture does not add up.

Knucklehead: The real question here is, how many more bumiputera company loans will be quietly written off under the banner of “supporting Bumiputera entrepreneurship”?

Agencies like Tekun, Mara and others continue to extend loans with seemingly little oversight or accountability.

Has anyone scrutinised these funds’ usage, or are both the issuers and recipients operating with an unchallenged sense of entitlement? It seems that both parties treat this public money as a birthright - free from the obligation of repayment.  

Yet Prime Minister Anwar Ibrahim stays silent on this issue. Why not address these individuals who drain public coffers while failing to foster a culture of true entrepreneurship?  

It’s no wonder Malaysia’s finances are on a dangerous path.

If we continue like this - propping up bloated agencies and funding civil servants who expect endless handouts - the road to financial ruin is almost guaranteed.

Coward: The founders of FashionValet appeared to have wanted to set up the platform from scratch.

Malaysiakini knows first-hand how difficult this is.  

Fashion retailing has been proven to be one of the most difficult platforms to convert to internet trading.

Throughout the dotcom and mobile app boom, we see the corpses of fashion retailers everywhere.

Even today, I challenge everyone to name a truly online brand-based boutique fashion retailer on the same line as their intention of setting up that company.

Shein does not count as its business model of piling them high and selling them cheap is more like Amazon’s book business.

The involvement of others with experience in retail and electronic infrastructure in this venture, in my opinion, shows that this is just an exercise to gain experience in a market at someone’s expense, in this case, the taxpayer.

This looks like a venture designed to fail so that the participants can set up other companies quickly to occupy the space should it show potential. Even then, the write-down is ridiculously large.

At the minimum, it raises the question of good government. In Malaysia, we of course immediately think of “other interference”.

I think the latter is not very easy to prove as we are the ones writing the textbook on how to stay within the letter of the written law without following the spirit.

The two founders-influencers, Vivy Yusof and her husband, are being put up as the fall persons.

Whether they are naively used or in on the plan will probably be clearer in the coming weeks.

However, if they think they can still successfully arrest this issue by taking responsibility and by a board member saying there is no hanky-panky, they are mistaken.

The speed and how it was dealt with is unusual for Malaysia.

The sum involved means someone will have to carry the can. The two founders tried, but it was not enough.

Oct: There seems to be a big conflict of interest between FashionValet and Vivy’s own fashion business in dUck and Lilit.

Strangely, the board of directors in FashionValet allowed it to happen. Vivy’s dUck and Lilit businesses are profitable but sad to say FashionValet has gone south. 

This colossal loss didn’t happen out of the blue but over six years. When a business doesn’t go as planned, questions must be asked.

It is important now to sieve through the financial data to ensure that funds in Fashion Valet were not used improperly.

Khazanah and PNB should have warned Vivy not to carry out a similar business as FashionValet in their venture agreement in the first place.

This is a prudent approach to business.

Observer from Space: Indeed, Khazanah and PNB must be held responsible.

The ones who signed the approval to disburse public money must be convicted for dereliction of duty or mismanagement of funds.

This scourge occurs time and again with flimsy excuses because no one is held accountable unless they are a political rival.

We, the tax-paying citizens, demand heads roll.

Else we may reconsider paying taxes.

Salvage Malaysia: Whether the business made or lost money eventually is another matter.

What perplexed me is how Khazanah and PNB agreed to invest in such a business at such lofty valuations.

It is valued in the hundreds of millions!

The people in both Khazanah and PNB involved in this deal should be given “responsible exits” from the government-linked investment companies (GLICs). Shameful.

NO 3S Please _ Stupid Silly Sombong: The founders of FashionValet expanded recklessly due to the RM44m funding.

If they did not receive the funding, the company would still be okay as they would have to spend their own money and would not have opened too many stores.  

They are supposed to be an online business.  

Everyone was talking about this couple as if they were some business wizards.  

Look at the results now.

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